An Evolutionary Perspective on Strategy-Making in Organizations: Theory, Comparative Analysis, Research Directions

This paper proposes that the strategic process in large, diversified organizations constitutes an internalized and contrived evolutionary mechanism nested in the external environmental context. The paper elaborates this argument and shows how it allows to integrate strategic management with organizational ecological theory and with other major paradigms in organization theory. Considering the direct and intervening effects of the environmental context on the strategic process, the paper suggests that inertia, adaptation, renewal, and transformation are the result of both environmental determinism and strategic choice and that different parts of the strategic process deal with environmental determinism and strategic choice. From the evolutionary perspective presented here, there is no real paradox in the view that old organizations are both more likely to manifest strategic and structural inertia and to have higher probabilities of survival. The comparative analysis of the evolutionary model presented in this paper and of the one proposed by Japanese theorists suggests that the distinction between induced and autonomous parts in the strategic process allows to clarify further the strong adaptive orientations of Japanese strategy-making and to examine its capacity to manage increasing pressures for strategic renewal. More research would be useful to establish the magnitude of various rates associated with the internal evolutionary mechanisms determining an organization’s capacities for adaptation and renewal. The capacity for strategic renewal seems least well understood in the current organizational literature and would benefit most from efforts to elucidate the functioning of experimentation-and-selection processes internal to the organization.